Corporate and Project Finance
Course(s) Year
Module
Code
Credit value Title Weighting Issue date Hand-in date Module Leader Staff contact
MSc Construction Project Management 2022/23
Corporate and Project Finance EBB_7_145
20
Project Finance
50%
14 March 2023
14 May 2023 at 11.59pm Dr Guowei Gu
Daniel Fong
Learning Outcomes
• Understand the key sources of finance required by construction and development companies and analyse the various ways in which corporate and project evaluations can be made with regard to funding;
• Evaluate dividend policy and calculate cost of capital for construction and development companies;
• Understand bank lending;
• Evaluate project with regard to cash flow, risks;
• Appraise complex and unfamiliar problems and apply professional judgement in order to devise solutions and/or contribute to decision making by construction industry clients;
• Apply statistical and numerical skills at an appropriate level.
This coursework will be anonymously marked.
Please follow the LSBU Anonymous Marking submission procedure. Submission must be made on Moodle site.
Approved by [Enter Approved by] Approved Date Select Date
Contents
1. 2. 3. 4. 5.
Introduction …………………………………………………………………………………………………………………….3 Assessment of the Module ……………………………………………………………………………………………….4 Feedback ……………………………………………………………………………………………………………………….4 Marking Scheme ……………………………………………………………………………………………………………..4 Submission Requirements and Deadline ……………………………………………………………………………5
Coursework Brief
Page 2 of 5
1. Introduction
This individual formative assessment provides the student a learning opportunity on the concepts of Project Finance. The coursework requires student to understand a real case scenario and investigate the state-of-the-art and trends in research and application of Information Management in the Industry.
Scenario
A new tunnel which will connect East and South-East London is being built as an additional facility to the existing toll-free Blackwall Tunnel. The Silvertown Tunnel project is being delivered by the Riverlinx consortium under a design, build, finance, operate and maintain contract with Transport for London (TfL), funded through private project finance.
Riverlinx reached financial close and commensed construction in 2019. The Sponsors will be supplying a total of £108 million in equity through a combination of shareholder loans and capital. A financing package across a number of financial institutions supplies £1,210 million in debt:
Loan tranches
Senior debt
Coverd loan
Kexim direct loan Equity bridge loan Institutional fixed-rate
Amount
£484m £354m £181m £102m £90m
Type
LIBOR+195bp LIBOR+175bp LIBOR+95bp LIBOR+325bp 375bp
Tenor
30-year
18-year
30-year
Construction period only 30-year
Coursework Brief
Page 3 of 5
Upon the expected opening of the facility in 2025, the consortium will receive Availability Payments from TfL for 25 years at £65 million per annum, which is index (RPI) linked as well as performance (incident response, asset inspection and maintenance, management reporting to TfL) dependent.
Due to the pandemic, energy crisis and other factors, the estimate final cost has risen from £1 billion to £1.2 billion.
Coursework Requirement
Prepare a 2-part coursework in which you provide consortium with the following:
(1) Report – Appraise the refinancing options at practical completion and propose a refinancing plan (in MS Word or PDF format). This should include a discussion of the relevant risks, their potential impact on the cashflow, and assumptions made; and
(50%)
(2) Cashflow forecast – Produce one cashflow model for the project with the existing financial arrangement from year 2019 up to 2025 as well as between year 2025 to 2050 with the proposed refinancing plan. The model must be done in Excel with all in-cell formulas. All assumptions, finance-related costs, yearly balance and profitability should be shown clearly.
(50%)
The report should be formally structured and be approximately 2,500 words long (excluding cashflow). A word count must be provided.
2. Assessment of the Module
The assessment of this module consists of component as listed in the table below.
Component
Weighting
Pass Mark
SC1 (Coursework) SC2 (Coursework) Module
50% 45%
50% 45% 100% 50%
This coursework covers component SC2 (50%).
3. Feedback
Feedback will normally be given to students 15 working days (3 calendar weeks) after the final submission of an assignment or as advised by their module leader.
General feedback, applying to all students, will also be provided within 15 working days.
4.
Marking Scheme
ITEMS
MARKS
Report – Appraisal of the relevant refinancing options and proposal of the most suitable refinancing plan
22
2a Coursework Brief
1a 1b 1c
Report – Discussion of relevant risks, their potential impact on the cashflow, and assumptions 22 made
Cashflow forecast – Comprehensiveness of relevant cashflow items. Appropriate choice of item 22 and assumption values
Page 4 of 5
Report – Presentation, including referencing style
6
Cashflow forecast – Ability to translate the proposed refinancing plan accurately into an informative cashflow model
22
2b
2c Cashflow forecast – Structure and presentation of model 6
5. Submission Requirements and Deadline
To be submitted on Moodle (with Turnitin) before Sunday 14th May 2023, 11:59pm.
The report should be a single file in MS Word or PDF format, plus an Excel workbook for the cashflow.
Scanned/Digitally-copied text apart from tables and figures in the file will not be marked.
Late Submission
The Late Submission and Extenuating Circumstances Notification form in MyAccount allows you to:
• Request the opportunity to submit your work up to 5 working days late for an uncapped mark if this is included as part of your DDS support arrangements;
• Notify us of an unexpected issue which is outside of your control that is impacting an assessment (an ‘Extenuating Circumstance’), which may allow an uncapped late submission or the opportunity to attempt the assessment at another time;
• Request additional time to submit an upcoming piece of coursework, without having a valid extenuating circumstance (but this will incur a marking penalty of 5% for each working day past the deadline, up to 5 working days).
If you submit an assessment late (up to 5 working days max.) and do not notify us in advance via the Late Submission and Extenuating Circumstances Notification form, your mark will be capped at a pass.
If you do not attempt your assessment within 5 working days of the main deadline, then you will usually be able to attempt the assessment again during the resit period, but your mark will be capped at a pass (unless you are able to provide evidence of a valid Extenuating Circumstance, in addition to giving a reason why you were unable to submit this evidence before the deadline had passed).